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Old 12-14-2007, 10:19 PM
 
783 posts, read 2,409,546 times
Reputation: 338

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I just quit my job on Wednesday and was offered a sub-contracting job today. I know I would be receiving a 1099 form but I have not even registered a business entity in NYC or NYS.

I would be paid under my legal name hence I'm guessing no need for registering a DBA.

I know corporations have a lot of filing to do but I am the lone employee, is it safe to register an S-corporation in other to claim so many expenditures?

I guess the information I need is; Which business type ( Corp, LLC or Sole Proprietary /DBA) allows me to claim the maximum amount allowed.

My expenditures include:-
  1. Renting a car if the need be to commute to 5 interstate centers.
  2. Purchasing Professional Liability Insurance.
  3. Purchasing health insurance after I have established myself.**I can't afford it for now
  4. Purchasing a cell phone / pager to have quick access to clients and of course the contractor [remember I am subcontracting].
  5. Purchase a vehicle to commute since especially NJ hasn't a vast network of public transit as NY. I have to take a personal loan to purchase this car since I don't own a business and need a reliable car.
  6. Printing a business stationaries such as business card, letter heads and envelopes.[ I was embarrass when the contractor asked me for a business card and I had none to offer]
  7. I plan on purchasing a computer and softwares to do most of the work myself-such as printing the stationaries; filing my taxes and others.
  8. Possibly many others.

If I have to register any type of business, I have until the end of December to do so; hence
  • what should I do?
  • Which business type should I register?

Last edited by npumcrisz; 12-14-2007 at 11:06 PM.. Reason: SP
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Old 12-15-2007, 06:39 AM
 
Location: Pocono Mts.
9,483 posts, read 11,244,566 times
Reputation: 11422
You are a sole proprietor, as long as you use your name as the business name, you need not register for a ficticious name.

Print business cards right away, after you network or interview or anything, you give them a card.

You will be responsible to pay your own taxes now, on a quarterly basis. If you don't pay quarterly, our tax bill will be high in April.

you can check out www.irs.gov for info on allowable business expenses, tax forms, business use of home - etc.

Good Luck!
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Old 12-15-2007, 08:53 AM
 
783 posts, read 2,409,546 times
Reputation: 338
Quote:
Originally Posted by poconoproud View Post
You are a sole proprietor, as long as you use your name as the business name, you need not register for a ficticious name.

Print business cards right away, after you network or interview or anything, you give them a card.

You will be responsible to pay your own taxes now, on a quarterly basis. If you don't pay quarterly, our tax bill will be high in April.

you can check out www.irs.gov for info on allowable business expenses, tax forms, business use of home - etc.

Good Luck!
No need for registration right? That is I don't have to file any document claiming I am a SP but how then do I open a SP business account?
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Old 12-15-2007, 10:40 AM
 
Location: Cary, NC
2,408 posts, read 10,047,220 times
Reputation: 1373
You can open a business checking account as a sole proprietor.
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Old 12-15-2007, 10:45 AM
 
11,303 posts, read 46,298,559 times
Reputation: 15288
If your business is involved with products or taxable services, then you'll need to register your sole proprietorship with the appropriate sales tax departments in your area.
They'll put you on a reporting schedule period consistent with what you tell them is your anticipated weekly/monthly/annual receipts. If your products/services are not subject to sales taxes, then you don't need to do this.

Go to your bank and ask to open up a "small business" checking account, even though it will be in your name. They'll use your SS# as a FED ID number for the business. If you anticipate only a few transactions per month, ask for a "low activity" business checking account. I've got one at Wells Fargo that costs me a flat $3.00 per month, for example, because I only receive two income checks per month and pay out two or three checks per month for the credit cards I use for my business.

Unless you need the potential business liability protection of a corporate shell ... with all of it's attendant costs to create and bookkeeping ... stay as a sole proprietor. OTOH, if you need that level of protection, then look into forming a corp or professional corp.
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Old 12-15-2007, 03:01 PM
 
3,648 posts, read 7,964,003 times
Reputation: 2997
Quote:
Originally Posted by npumcrisz View Post
I just quit my job on Wednesday and was offered a sub-contracting job today. I know I would be receiving a 1099 form but I have not even registered a business entity in NYC or NYS.

I would be paid under my legal name hence I'm guessing no need for registering a DBA.

I know corporations have a lot of filing to do but I am the lone employee, is it safe to register an S-corporation in other to claim so many expenditures?

I guess the information I need is; Which business type ( Corp, LLC or Sole Proprietary /DBA) allows me to claim the maximum amount allowed.

My expenditures include:-
  1. Renting a car if the need be to commute to 5 interstate centers.
  2. Purchasing Professional Liability Insurance.
  3. Purchasing health insurance after I have established myself.**I can't afford it for now
  4. Purchasing a cell phone / pager to have quick access to clients and of course the contractor [remember I am subcontracting].
  5. Purchase a vehicle to commute since especially NJ hasn't a vast network of public transit as NY. I have to take a personal loan to purchase this car since I don't own a business and need a reliable car.
  6. Printing a business stationaries such as business card, letter heads and envelopes.[ I was embarrass when the contractor asked me for a business card and I had none to offer]
  7. I plan on purchasing a computer and softwares to do most of the work myself-such as printing the stationaries; filing my taxes and others.
  8. Possibly many others.

If I have to register any type of business, I have until the end of December to do so; hence
  • what should I do?
  • Which business type should I register?
You really badly need to speak with an attorney concerning your state's laws re: independent contracting. The IRS HATES independent contractors because they escape all sorts of taxes and make deductions more of a nightmare than they already are. I promise you, if you do not go about this heads to tails the right way the government will make your life a living hell and ********* out of as much money as possible (usually a whole lot more than you were worth initially). You absolutely ought to seek legal advice from a professional, because independent contractors face all sorts of weird issues.
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Old 12-15-2007, 05:21 PM
 
11,303 posts, read 46,298,559 times
Reputation: 15288
coldwine's kinda' got it wrong here ...

Independent contractors DO NOT "escape all kinds of taxes". On the contrary, we get to pay MORE taxes than if we'd stayed working for somebody else; for example, we get to pay both the employee and employer portions of SS, Medicare, "head tax" (if taxed in your area), and similar taxes.

The only taxes we can opt out of are the personal "workman's comp" and "unemployment" at the personal cost of not having those benefits available should we need them ... but only if we've "opted out" of those safety nets as the sole proprietor. You cannot "opt out" and then later claim the benefits if you need them.

Oh, and as an independent contractor ... you get to pay ALL of the medical insurance and retirement programs costs. There's no one else to get a large group policy or help with matching contributions.

The Gov't allows us independent contractors to take certain deductions, such as "home office", "vehicle mileage", "leased equipment", and "office expenses". You'll just have to trust me when I tell you that your bookkeeping better be up to snuff to substantiate your claims. And there's no hanky-panky about some of these deductions ... the Fed's have a standard rate per mile to deduct, no matter what it costs you to run your vehicle (about 45 cents/mile). You won't be deducting outrageous expenses from your business without a lot of gov't scrutiny ... and the Feds will be looking for "red flags" over your shoulder all the time (expenses/deductions out of line with the prevailing data base info they have from others who do similar work to yours).

Forget consulting with an attorney about going into your business unless there's something weird or risky about your enterprise ... the first person you need to contact is your ACCOUNTANT who can advise you on what records to keep, and how to substantiate your needed business deductions.
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Old 12-15-2007, 07:39 PM
 
2,197 posts, read 6,895,267 times
Reputation: 1698
I agree with sunsprit. The self-employed bear a heavy burden for a country founded on the entrepreneurial spirit. Paying double SS taxes for a program that won't even be around when you need it truly sucks. And many of the write-offs are available to anybody who itemizes, not just the self-employed. You have to really want to work for yourself, because the government makes it pretty undesirable from a tax standpoint.
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Old 12-16-2007, 10:40 AM
 
783 posts, read 2,409,546 times
Reputation: 338
Quote:
Originally Posted by coldwine View Post
You really badly need to speak with an attorney concerning your state's laws re: independent contracting. The IRS HATES independent contractors because they escape all sorts of taxes and make deductions more of a nightmare than they already are. I promise you, if you do not go about this heads to tails the right way the government will make your life a living hell and ********* out of as much money as possible (usually a whole lot more than you were worth initially). You absolutely ought to seek legal advice from a professional, because independent contractors face all sorts of weird issues.

Or really...enlighten me
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Old 12-16-2007, 10:43 AM
 
783 posts, read 2,409,546 times
Reputation: 338
Quote:
Originally Posted by sunsprit View Post
coldwine's kinda' got it wrong here ...

Independent contractors DO NOT "escape all kinds of taxes". On the contrary, we get to pay MORE taxes than if we'd stayed working for somebody else; for example, we get to pay both the employee and employer portions of SS, Medicare, "head tax" (if taxed in your area), and similar taxes.

The only taxes we can opt out of are the personal "workman's comp" and "unemployment" at the personal cost of not having those benefits available should we need them ... but only if we've "opted out" of those safety nets as the sole proprietor. You cannot "opt out" and then later claim the benefits if you need them.

Oh, and as an independent contractor ... you get to pay ALL of the medical insurance and retirement programs costs. There's no one else to get a large group policy or help with matching contributions.

The Gov't allows us independent contractors to take certain deductions, such as "home office", "vehicle mileage", "leased equipment", and "office expenses". You'll just have to trust me when I tell you that your bookkeeping better be up to snuff to substantiate your claims. And there's no hanky-panky about some of these deductions ... the Fed's have a standard rate per mile to deduct, no matter what it costs you to run your vehicle (about 45 cents/mile). You won't be deducting outrageous expenses from your business without a lot of gov't scrutiny ... and the Feds will be looking for "red flags" over your shoulder all the time (expenses/deductions out of line with the prevailing data base info they have from others who do similar work to yours).

Forget consulting with an attorney about going into your business unless there's something weird or risky about your enterprise ... the first person you need to contact is your ACCOUNTANT who can advise you on what records to keep, and how to substantiate your needed business deductions.
I don't even have an accountant.
Do I really need one and how do I get one. " Just walk into an office and say I need you"
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